Saudi King Salman on Tuesday ordered that women be allowed to drive from next June, in a historic decision that makes the ultra-conservative kingdom the last country in the world to permit women behind the wheel.

This picture from October 22, 2013 shows Saudi activist Manal al-Sharif behind the wheel in Dubai in solidarity with women in her homeland campaigning to get the right to drive.

The longstanding driving ban was seen globally as a symbol of repression of women in the Gulf kingdom and comes after a years-long resistance from female activists.

The decision, which risks riling religious conservatives, is part of Saudi Arabia's ambitious reform push aimed at adapting to a post-oil era and improving its battered global reputation for its human rights record.

Saudi Arabia will use the "preparatory period" until then to expand licensing facilities and develop the infrastructure to accommodate millions of new drivers, the announcement added.

Conservative clerics in Saudi Arabia, an absolute monarchy ruled according to sharia law, have justified the ban over the years, arguing that it would lead to promiscuity. One of them claimed that driving harmed women's ovaries.

Many women's rights activists were jailed over the years for defiantly flouting the ban.

Activist Manal al-Sharif, who led the 2011 "Women2Drive" protest movement, tweeted: "Today, the last country on earth to allow women to drive... we did it."

- Euphoria and disbelief -

"It is a testimony to the bravery of women activists who have been campaigning for years that... Saudi Arabia has finally relented and decided to permit women to drive," Amnesty International said.

Saudi Arabia has some of the world's tightest restrictions on women.

Under the country's guardianship system, a male family member -- normally the father, husband or brother -- must grant permission for a woman's study, travel and other activities.

It was unclear whether women will require their guardian's permission to apply for a driving licence.

After Tuesday's historic announcement, the hashtags "I am my own guardian" and "Saudi Women Can Drive" began gaining traction on social media, while many openly lampooned conservatives who long favoured the ban.

One Saudi woman tweeted a picture of three women in a convertible going shopping, with the message: "Us soon."

The policy could socially liberate women -- heavily reliant on foreign drivers and ride sharing apps -- and also boost the economy at a time of low oil prices by increasing their participation in the workforce, experts say.

The announcement follows a dazzling gender-mixed celebration of Saudi national day at the weekend, the first of its kind, which aimed to spotlight the kingdom's reform drive despite a backlash from religious conservatives.

Men and women danced in the streets to drums and thumping electronic music, in scenes that are a stunning anomaly in a country known for its tight gender segregation and an austere vision of Islam.

Women were also allowed into a sports stadium -- previously a male-only arena -- to watch a musical concert, a move that chimes with the government's Vision 2030 plan for social and economic reform.

With more than half the country aged under 25, Crown Prince Mohammed bin Salman, the king's son and the architect of Vision 2030, is seen as catering to the aspiration of the youth with measures that include promoting women empowerment.

- 'A great step' -

The US State Department hailed the new policy as a "great step in the right direction", echoing a similar comment from UN Secretary General Antonio Guterres.

Tuesday's announcement comes at a crucial time for Saudi Arabia.

The OPEC kingpin is in a battle for regional influence with arch-rival Iran, bogged down in a controversial military intervention in neighbouring Yemen and at loggerheads with fellow US Gulf ally Qatar.

"Allowing women to drive is the biggest PR win that Saudi Arabia -- and Prince Mohammed -- could have in a single swoop," said Jane Kinninmont, a research fellow at London's Chatham House.

Prince Mohammed is set to be the first millennial to occupy the throne, although the timing of his ascension remains unknown.

Already viewed as the de facto ruler controlling all the major levers of government, from defence to the economy, the heir apparent is seen as stamping out traces of internal dissent before any formal transfer of power from his 81-year-old father.

His gambit to loosen social restrictions, which had so far not translated into more political and civil rights, seeks to push criticism over a recent political crackdown out of the public eye, some analysts say.

Authorities this month arrested more than two dozen people, including influential clerics and activists, in what critics decried as a coordinated crackdown.